When they asked me to write a blog about the shift from traditional to modern accounting, I asked myself: what kind of message should my readers get to differentiate my blog post from the many others. My idea of a blog post was to inspire people in co-shaping their ideas and to do what Dynatos stands for: “Being a trusted advisor”.
Back to my topic then, Continuous Accounting. It is a revolutionary way for finance organizations to reduce costs, risks of accounting errors, and liberate accountants to provide value-added analysis. It transforms the accounting department from a strictly processing environment to an agile department where analytics and business-driven decisions are backed by near real-time data. Virtually closing books at the business pace, CFO’s can access financial data to make informed capital decisions that seize momentum and evade market risks down the stream. CFO’s become the most valuable strategic advisor of the CEOs.
Companies implementing Financial Process Automation principles will realize competitive gains from the great ability to forecast more accurately than market peers. It all comes to the following statement: If you can determine what your company’s state is earlier than at the end of the accounting period, your financial decisions are aligned with your business performance and your resources are better optimized.
These are just some of the benefits of process automation, other include improved data accuracy through process automation, high efficiency, lower labor costs and more engaged accountants. Towards closing of the accounting period, accountants suffer under these short high-pressure deadlines, with most of the work compressed into low number of days. And the rest of the time, they are recovering from the stress. Do you get the best of them under these circumstances? And do they love what they do? With certainty, the answer is negative, as they need to get the time to do what they love most: understanding numbers to advise senior leaders to drive the business forward.
The principles of modern accounting were developed in the early 1800’s. That’s right, the 1800’s. This record-to-report model—an accounting cycle that starts with the booking of transactions and concludes with the publication of the financial statements—remained solidly in place.
The globalization waves, internet, digitized data, mobile applications have reshaped how the business is conducted. In this fast-pace global economy, the record-to-report process cannot keep pace. Having a powerful engine, and not the means to track the speed with an odometer – is contradictory to our natural behavior to complete the proportionality rule.
Still, most finance organizations still work with rigid accounting systems, and accountants will admit to the hardships of their period-end tasks, working long days into evenings, eating dinner at their desks – exhausted, they’re more likely to errors at a time when data accuracy counts most. Combined with the pressure on the finance directors to identify potential risks which is not easy without accurate financial data. And the financial planning and budgeting are still forced to wait until the end of month to build these forecasts – instead having day-to-day abilities to fetch near real-time data.
Financial Process Automation neutralizes these experiences. Thanks to the automation of traditional accounting tasks like journal entries, variance analysis, account reconciliations, and intercompany transactions, the period-end tasks and controls that are traditionally performed at the end of the accounting cycle are executed as the days go by, in the cloud. Instead of bringing up all of the data in one batch process as before, the batch is split up into a series of smaller tasks that are scheduled early in the accounting period process and embedded in the accountants’ daily workflow.
With the tasks broken down into smaller bits, the completion of these elements becomes routine. Accountants now have the means to virtually close the books on a daily basis, diminishing the strain they normally experience during the closing process.
Don’t do fence sitting. Break free from the traditional process and modernize your financial organization with Dynatos empowered by Kofax Readsoft.